Strayer Education (STRA) vs. Its Peers Critical Review

Strayer Education (NASDAQ: STRA) is one of 20 public companies in the “General Education Services” industry, but how does it contrast to its competitors? We will compare Strayer Education to related companies based on the strength of its institutional ownership, analyst recommendations, dividends, valuation, risk, profitability and earnings.

Analyst Ratings

This is a breakdown of current ratings and price targets for Strayer Education and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Strayer Education 0 2 1 0 2.33
Strayer Education Competitors 61 439 454 2 2.42

Strayer Education currently has a consensus target price of $94.00, suggesting a potential upside of 8.75%. As a group, “General Education Services” companies have a potential upside of 1.92%. Given Strayer Education’s higher probable upside, equities research analysts plainly believe Strayer Education is more favorable than its competitors.

Institutional and Insider Ownership

93.0% of Strayer Education shares are held by institutional investors. Comparatively, 71.8% of shares of all “General Education Services” companies are held by institutional investors. 6.7% of Strayer Education shares are held by insiders. Comparatively, 15.0% of shares of all “General Education Services” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Strayer Education and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Strayer Education $449.07 million $77.90 million 26.93
Strayer Education Competitors $909.14 million $144.34 million 4.68

Strayer Education’s competitors have higher revenue and earnings than Strayer Education. Strayer Education is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Strayer Education and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Strayer Education 7.90% 17.65% 11.15%
Strayer Education Competitors 0.80% 0.13% 2.03%

Dividends

Strayer Education pays an annual dividend of $1.00 per share and has a dividend yield of 1.2%. Strayer Education pays out 31.2% of its earnings in the form of a dividend. As a group, “General Education Services” companies pay a dividend yield of 1.6% and pay out 34.6% of their earnings in the form of a dividend.

Volatility & Risk

Strayer Education has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Strayer Education’s competitors have a beta of 1.14, meaning that their average share price is 14% more volatile than the S&P 500.

Summary

Strayer Education competitors beat Strayer Education on 8 of the 15 factors compared.

Strayer Education Company Profile

Strayer Education, Inc. is an education services holding company. The Company provides post-secondary education and other academic programs, through its subsidiaries, Strayer University (the University) and New York Code and Design Academy (NYCDA). As of December 31, 2016, the University offered undergraduate and graduate degree programs in business administration, accounting, information technology, education, health services administration, nursing, public administration and criminal justice at 74 physical campuses located in the Mid-Atlantic and Southern regions of the United States, and online. The University also offers an executive Master of Business Administration (MBA) online through its Jack Welch Management Institute. Its subsidiary, NYCDA, provides non-degree courses in Web and application software development, primarily at its campus in New York City. Each undergraduate degree program includes courses in oral and written communication skills, as well as mathematics.

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